Dockless scooters. Bike sharing. Self-flying taxis. The way we move is changing—with big implications for insurance.

Lines are blurring right now in the world of transportation on a scale note seen since the days of Henry Ford and the Model T. Services like Uber and Lyft offer transport-as-an-app. Bike sharing services are now available in hundreds of cities. Around the world dockless scooters like Bird are empowering and annoying pedestrians in equal measure. Airbus is even working on a self-flying taxi.

Many of these innovations are tech-driven. Yet the fundamental driver of all this change (if you’ll pardon the pun) is not technological but demographic. More than half of the world’s population lives in cities. The United Nations projects that this portion will rise to two thirds by 2050.

The fundamental driver of all this change (if you’ll pardon the pun) is not technological but demographic.

That means that while a particular startup sub-industry might fail, these new ways of moving are here to stay. And that has huge implications for many financial services organizations, especially those that provide insurance.

Insurers have been keeping close tabs on new transport developments like self-driving cars and next-generation telematics for years now—and with good reason. New ways of moving mean new risks, which demand new forms of insurance.

There’s also a huge opportunity for new business models to emerge based on the rich information that many of these new transportation developments provide. Capitalizing on the abundance of data, some insurers are offering transport insurance by the mile. Rates very based on the route the customer takes to their destination, or based on the time of their journey.

To win in this space, insurers will need to take great pains to win the trust of customers with their data.

One of the most intriguing possibilities presented by transportation’s transformation is unified insurance. As the 2019 Fjord Trends report points out, the transportation landscape right now is highly fragmented. A person might take an Uber to a train station, ride a train, and then go the last mile of their journey on a dockless scooter—and at each step, they interact with a different company.

This is inefficient, and as these new platforms mature, it is likely that some actor in the ecosystem will develop a solution. Fjord predicts that 2019 will see a race towards greater clarity and organization in mobility ecosystems, with a drive towards multimodal and intermodal services and platforms. The report projects that subscription-based payment models will be widely available.

As this consolidated mobility landscape takes place, an opportunity will arise for insurers to address one of the industry’s traditional customer pain points: fragmented and confusing services. What if, instead of maintaining separate policies for each vehicle, a household’s car insurance was simply rolled in to their monthly mobility subscription payment? Achieving this would require addressing some significant challenges. But it seems to me that the opportunity will eventually produce the proponent.

Of course, the examples above are just a fraction of the opportunities created for insurance by the changing transportation landscape. I’d love to hear where you see the industry headed. My contact information can be found at the top of this post.

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